Expert: Richard Hixenbaugh - 6/27/2010

Question
My 22 year old daughter wrecked her college roommates car. The accident was her fault. I filed a claim with Farmers (my company) figuring my insurance would cover. However Farmers winded up going to arbitration with State Farm (roommates company) and the arbitration board ruled the insurance goes with the car and not the person so State Farm covered the roommates car.  Now two years later State Farm has hired a firm to collect 7K from my daughter who is a penniless, just graduated college student with no assets and 10k of student loans. What up? The investigation prior to arbitration clearly showed both kids occasionally drove each others cars and had each others keys on their personal key rings because they had to deal with a double parking situation at their college apartment.  They had to double park because their apartment had only one spot for them. Farmers says my daughter did not have permission to drive the car that particular day. These girls lived together for 3 years including a year after the incident.  After losing arbitration how can State Farm come back on her two years later with a personal lawsuit. No injuries only 7k in vehicle damage which is debatable also because the first estimate was only 2.5 k to repair.  Shouldn't Farmers (her firm)be required to represent her and supply her with an lawyer?  Wyoming.  Thank You.

Answer
Hi Jim,

This is one of those situations where her insurance will be useless. Since she was not driving her own vehicle her insurance does not come into play at all.

She could try to fight the non-permissive use thing based on what you said that they had each others keys on their key ring. This would imply continuous permission. However, this could also cause a problem because most insurance companies require that everyone in the household be listed as a driver or there may not be coverage. So in that case the insurance company could have denied coverage and left your daughter to pay the 7k repair bill. I'm not sure what the statute of limitations is in your state, but you should check. If it is past the statute they can not sue your daughter. If it is still within the statute then you daughter should contact them to try to make some kind of payment arrangement.

I hope this helps
Richard Hixenbaugh